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Published September 2005 Stay
in control of your Are You Set to Reach Your Retirement Savings Goals? Although he may never have said it, Mark Twain, the author of “Huckleberry Finn,” is often credited with this quote: “Everybody talks about the weather, but nobody does anything about it.” Unfortunately, just about the same thing can be said about saving for retirement: We all think about it, but many don’t take much action. In fact, your fellow Americans are, at the moment, doing a thoroughly inadequate job of saving for their retirement. Early in 2005, personal saving as a percentage of disposable personal income was just 0.4 percent, according to the Bureau of Economic Analysis, an agency of the U.S. Department of Commerce. And consider these numbers from the 2005 Retirement Confidence Survey, issued by the Employee Benefits Research Institute:
How can you determine how much you’ll need to live comfortably during retirement? You’ll need to consider a variety of factors, including the age at which you retire, your retirement lifestyle, your health and your projected longevity. To arrive at a good estimate, you may want to work with a financial professional — someone with the tools to generate several alternative retirement-income scenarios. After you determine about how much money you’ll need during your retirement years, your next step is to determine where that money will come from. Basically, you will need to rely on a combination of three sources: Social Security, employer-sponsored retirement plans, and personal savings and investments. Let’s take a quick look at each of these investment options that most of us will be using:
By taking the time to calculate your retirement funding needs, and by knowing where your income is coming from (and how much you can expect), you can largely avoid an unpleasant financial shortfall when you retire. Eric Cumley is a Certified Financial Planner and investment representative with Edward Jones in south Everett. He can be reached at 425-353-2322. Edward Jones is an NYSE-member investment firm with a network of more than 9,000 offices nationwide. |
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© 2005 The Daily Herald Co., Everett, WA |
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